How Ola & Uber is exploiting the travel Ecosystem in India

Today everybody in India is familiar with the name of OLA & Uber because they have emerged as a standout option to fulfill local transportation requirements in a cost effective manner. Even a 6 year old child knows that a cab can be called with just a tap of a button.

They are penetrating & digging very deep into our lives with every passing day and luring us in the habit of taping by developing an ecosystem around us. As of now both OLA & Uber has played there cards very well & managed to build a very strong ecosystem of demand & supply.

In the first phase of this ecosystem drivers partners were earning more than 10 times of what they used to earn earlier in the form of incentives & on the other side customers were paying nearly 1/4th of the cost they used to pay for personal air conditioned local transport.

Earlier except Mumbai & Kolkata local population were reluctant to board a cab to fulfill local travel requirements sue to the cost associated with it but OLA & Uber took their platform to every household.

The above ecosystem looks & sounds perfect to both driver partners & customer but the fuel i.e. money for running this perfect imbalance ecosystem is coming from Venture Capital funds. Now a days we are hearing this term more than often as VC is the backbone of these cab aggregator companies who have invested huge funds in these companies.

In general many of us are investors as we tend to invest our money in equity shares, mutual funds, LIC, ulips, etc. Money is always invested for returns that can tangible or intangible. So, if VC is investing huge money then they will be expecting huge returns also

Now comes the tricky part of this ecosystem in which a hype is created where customers are just bothered about what they are paying for traveling per km only without knowing the science behind it & drivers are fascinated by microentrepreneurship concept & the money they are earning out it.

Drivers are not calculating that how much they will be investing in it in terms of money, time, resources, etc. This situation has created a win-win situation for cab aggregators, car companies & Banks. But this has adversely affected the travel ecosystem in India which includes Auto rickshaw, Kali peli taxi, Radio taxi, small travel agents, etc. I agree with the fact that all the above use to charge much more but we all know that living is metro cities is not cheap either.

But now customers are also facing the heat as the fuel gauge (funds) is getting low & further aspects of raising funds are getting difficult day by day. We all know that every company or business needs to sustain & sustainability comes by generating profits not revenue.

In near future we will be victimized by these cab aggregators & will be charges high fares as no one can run the company in loss forever. Now, we are habitual of travelling in Air conditioned chauffeur driven cabs in the price i.e. cheaper than the Auto Rickshaw but this would not last forever.

Soon there will be a situation where all other means of local private transport will fade away & these cab aggregators will rule the market. At that point of time we will left with no other option other than being the victim of these cab aggregators.


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